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Testing the Moderation Effects on Gartner’s Customer Relationship

Management Practices and Customer Acquisition

Chapter · January 2020

DOI: 10.1007/978-3-030-23010-4_16

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 Testing the Moderation Effects on Gartner’s Customer Relationship Management
practices and Customer Acquisition

Subhasish Das

Ph D scholar,CUTM,Jatni, Odisha,India,

Dr. (Prof). Manit Mishra

Associate Professor, IMI,Bhubaneswar, Odisha, India

Dr. (Prof). Prasanta Kumar Mohanty

Dean, School of Management, CUTM, Jatni, India

Abstract

The prime objective of the study is to understand the moderating effect of job satisfaction

and gender on the relationship between Customer Relationship Management (CRM) practices

and Customer acquisition. The study first investigates the relationship between the four best

CRM practices; CRM Vision, CRM strategy, valued customer experience and Organizational

collaboration, suggested by Gartner’s competency model with customer acquisition and then

tries to test the moderation effect of employee’s job satisfaction and gender. The findings of the

study are based upon the responses from 196 employees of a selected retail store, through a self-

administered questionnaire. The study finds a significant moderation effect of job satisfaction on

the relationship between Gartner’s CRM practices and customer acquisition.

Key words: Gartner’s CRM practices, Customer acquisition, Moderation effect of job

satisfaction and gender.

Introduction

CRM has become one of the vibrant topics of the 21st century. The cut throat competition

and the advent of advanced technology have made it inevitable (Chen & Popovich, 2003). CRM
originated from the concept of relationship marketing, whose ultimate objective is to improve

long term profitability by shifting product centric marketing to customer centric marketing.

Customers differ in their preferences and purchasing habits. So all customers are not alike hence

firms must treat them differently (Bose, 2002). CRM helps in understanding customers and tailor

their offerings to maximize the overall value for the customers (Chen & Popovich, 2003). Today

the market is very competitive and is also saturated to some extent hence it is highly necessary to

understand the customers and to keep personal relationship with them (Chou et. al., 2002). CRM

is an enterprise level effort and integrates all departments of the business such as marketing,

sales, human resource, purchase, manufacturing, assembling, product testing etc.(Greenberg,

2004).CRM collects customer’s information from various sources and precisely predicts their

behavior and it practically reduces the gap between seller and buyer (Kotler, 1997).

Though several studies have been conducted on CRM still the literature is in its infancy

(Buttle, 2009). Several frameworks of CRM are proposed by researchers but the latest and least

studied framework is Gartner’s framework (Chandler, Hostmann, Rayner & Herschel, 2011) and

the study on Gartner’s True CRM practices is very rare (Peelen, Montfort, Beltman & Klerkx,

2009). Gartner’s competency model of ‘True CRM practices’ has suggested best practices for a

successful CRM. It proposed eight components of CRM i.e. CRM vision, CRM strategy, valued

customer experience and organizational collaboration, processes, information, technology and

metrics. CRM Vision, CRM strategy, customer experience and organizational collaboration

positively impact CRM process (Peelen, Montfort, Beltman & Klerkx, 2009).

This study is based on Gartner’s framework of CRM success and tries to examine the

effect of Gartner’s CRM practices on customer acquisition and tests the moderation effect of

employee’s gender and job satisfaction. This study will explore the relationship among CRM
components suggested by Gartner and will identify the conditions for its success through

moderation.

Literature review

CRM breaks the intra organizational boundaries by linking the internal processes with

external networks and makes customer related data available to all on a common platform by

practically connecting the front and back office activities (Buttle, 2009).

Gartner group is one of the leading researchers group on CRM. ‘Gartner’s competency

model’ suggests eight components for a successful CRM (See Fig-1). The components are CRM

vision, CRM strategy, valued customer experience and organizational collaboration, processes,

information, technology and metrics. The best practices for creating a CRM vision are

‘developing CRM leadership from top’, ‘understanding how CRM is going to change the

enterprise’ and understand how CRM is unique for your enterprise’ (Kirkby, 2001). ‘developing

a long term road map to decisions into’, ‘thinking CRM as a combination of people, process and

technology’, ‘clear articulation of goals and tactics to achieve them and ‘understanding all

customers as not equal’ as the best practices for developing a CRM strategy (Kirkby, 2001).

‘Involving customer in the CRM process’, ‘integration of all channels’ and ‘managing change

and communication with customers and getting the basics first’ are the best CRM practices of

customer experience (Kirkby, Thompson &Wecksell, 2001). ‘Establishing cross functional

teams’, ‘integrating change management and training from the beginning’ and appointing an

overall CRM leader” are the best practices for organization collaboration (Radcliffe, Thompson

& Eisenfeld, 2001).

 Peelen, Montfort, Beltman & Klerkx (2009) has done a study on Gartner’s framework

and has found that the practices are interrelated. CRM vision, CRM strategy, customer

experience and organizational collaboration affect CRM process (Eisenfeld & Nelson, 2003).

Fig-1: Gartner’s competency model (Source-Gartner research)

On the basis of the above references the following hypotheses are developed,

• H1: CRM Vision affects customer acquisition

• H2: CRM Strategy affects customer acquisition

• H3: Customer experience affects customer acquisition

• H4: Organizational collaboration affects customer acquisition

• H5: Employees’ Gender moderates the relationship between CRM practices and customer

acquisition

• H6: Employees’ job satisfaction moderates the relationship between CRM practices and customer

acquisition
Research methodology

This study is based on the primary data collected from the selected retail store ‘The

World’ at Bhubaneswar, Odisha. The respondents of the study are the employees of the store and

the sample size of the study is 196.

Table-1: Respondent's profile

Demographics Particulars No. %
Male 112 57
Gender
Female 84 43
<20 Yrs 93 47
20-35 Yrs 48 24
Age
35-50 Yrs 38 20
>50 Yrs 17 9
<1yr 36 18
1-3 years 68 35
Experience
3-5 Yrs 53 27
>5 Yrs 39 20
Higher 33 17
Level of Job Middle 91 46
Lower 72 37

Table-1 shows 57% of the respondents are male and 43% are female. 47% are below 20

years of age, 24% are between 20 to 35 years of age, 20% are 35-50 years of age and rest 9 % are

above 50 years of age. 18% of respondents are having an experience less than 1 year 35 % have

1 to 3 years 27% have 3 to 5 years and rest 20% have above 5 years of experience. Lastly 17% of

respondent’s belong to top management, 46% of respondents are from middle management and

rest 37 % belong to lower management.

Measures
 The study includes constructs of Vision, Strategy, Valued customer experience,

Organizational collaboration, customer acquisition and moderators such as Job satisfaction and

Gender. The CRM practices are measured on the basis of Gartner’s ‘CRM Best practices: From

vision to collaboration’ (Eisenfeld & Nelson, 2003), customer acquisition is measured on the

basis of indicators suggested by Buttle (2009) and job satisfaction by Yiing & Ahmad (2009).

The appropriateness of the study is tested by a pilot survey with a sample of 30

respondents (Hair et al., 2007). The scale was found appropriate and good and the scale was

applied for collecting data from the 196 respondents. As structural equation model includes

measurement and structural model therefore first an exploratory factor analysis (EFA) was done

to understand the underlying constructs followed by the confirmatory factor analysis (CFA).

Data analysis

SEM is used for the data analysis. SEM is a combination of measurement model and a

structural model. Measurement model checks the appropriateness of the data or it checks whether

the data fits the model. The structural model measures the structural relationships.

Construct validity

Convergent validity and discriminant validity can test the validity of the construct.

Convergent validity is the extent to which the items that should be correlated are truly correlated

to each other and divergent validity is the extents to which the items that should be correlated are

in fact are not correlated (Campbell, 1959; Hair et al., 2006). Standardized factor loadings and

composite reliability should be more than 0.7 for convergent validity and average variance

extracted (AVE) should be more than 0.5 (Bagozzi & Yi, 1988). The values of AVE of all the
constructs should be more than maximum shared variance (MSV) for discriminant validity

(Fornell & Lacker, 1981).

Table-2: Construct validity

Constructs CR AVE MSV MaxR(H)
Vision 0.89 0.880 0.348 0.97
Strategy 0.90 0.768 0.233 0.98
Experience 0.89 0.675 0.003 0.99
Collaboration 0.95 0.845 0.295 0.98
Acquisition 0.81 0.571 0.091 0.99

Table-2 shows composite reliability for all constructs is more than 0.7 and the values of

AVE are more than 0.5 hence it holds convergent validity. The values of AVE are more than

MSV for all constructs, hence discriminant validity is ensured. It indicates the validity of the

scale and the items are the true measures of the underlying constructs.

Measurement model

The measurement model is tested with the help of CFA (Teo, 2011). CFA measures the

extent to which the measured variables actually represent the construct (Hair et al., 2007)

Reporting model fit

‘Chi-square and degrees of freedom (χ2/df), root mean square of approximation

(RMSEA), standardized root mean square residual (SRMR), comparative fit index (CFI) and

parsimonious normed fit index (PNFI)’ can be reported for asserting model fit (Hooper,

Coughlan and Mullein, 2008) to indicate a good model fit. In addition goodness of fit index

(GFI), adjusted goodness of fit index (AGFI) and normed fit index (NFI) are also suggested for

checking model fit (Chowley & Fan, 1997). The P-value should be greater than 0.05, value of

(χ2/df) should be as high as 5.0 (Wheaton et al. 1997) to as low as 2.0 (Tabachnick and Fidell,

2007). The value of RMSEA should be lesser than 0.06 (Hu and Bentler, 1999).The value of
SRMR should be lesser than 0.05(Byrne, 1998; Diamantopoulos and Siguaw, 2000), the value of

CFI should be more than 0.95 (Hu and Bentler, 1999) The value for GFI, AGFI, NFI and CFI 0.9

and a value less than 0.08 for RMSEA indicates a good model fit and the value of the ratio

between Chi-square and degrees of freedom (χ2/df) should be less than 2.5 (Gerpott et al., 2001;

Homburg & Baumgartner, 1995; Hair et al., 2006).

Figure-2: The measurement model

 Table-3: Model fit summary of the measurement model
Indices Obtained Threshold References
values values
P-value 0.229 >0.05 Wheaton et al. 1997
CMIN/ 1.113 0> CMIN/DF<5 Wheaton et al. 1997, Tabachnick & Fidell, 2007
DF
RMSEA 0.024 <0.08 Hu & Bentler, 1999
GFI 0.944 >0.9 Gerpott et al., 2001; Homburg & Baumgartner,
AGFI 0.917 >0.9 1995; Hair et al., 2006
NFI 0.962 >0.9
CFI 0.996 >0.9 Hu & Bentler, 1999
SRMR 0.030 <0.05 Byrne, 1998; Diamantopoulos & Siguaw, 2000

Table-3 shows the values of all fit indices are as per the required threshold values

therefore the measurement model indicates a good model fit and we can conclude that the items

under study are reliable indicators of the underlying construct and we can test structural

relationships (Teo, 2011).

Structural model

Figure-3: The structural model

Table-4: Model fit summary of the structural model

Indices Obtained Threshold References
values values
P-Value 0.229 >0.05 Wheaton et al. 1997
CMIN/DF 1.113 0> CMIN/DF<5 Wheaton et al. 1997, Tabachnick & Fidell, 2007
RMSEA 0.024 <0.08 Hu & Bentler, 1999
GFI 0.944 >0.9 Gerpott et al., 2001; Homburg & Baumgartner, 1995; Hair
AGFI 0.917 >0.9 et al., 2006
NFI 0.962 >0.9
CFI 0.996 >0.9 Hu & Bentler, 1999
SRMR 0.030 <0.05 Byrne, 1998; Diamantopoulos & Siguaw, 2000
 Table-4 shows that the values of the indices are within the threshold limits hence we can

conclude that the structural model also shows a good model fit.

The standardized regression weight and their significance level can be observed in the following

table.

Table-5: Regression weights

The relationships Significance
Estimate P

0.542 Significant at
Acquisition - Vision 0.000
0.000
-0.074 Insignificant
Acquisition - Strategy 0.403
Customer 0.044 Insignificant
Acquisition - 0.483
experience
-0.167 Insignificant
Acquisition - Collaboration 0.058

Table-5 shows that only CRM Vision (c=0.054, p<0.000) has a significant effect on

customer acquisition and the influence of all other CRM practices are insignificant.

Testing moderation effect of Gender

From Table-5 it is obvious that only CRM vision has a significant impact on customer

acquisition. Therefore only this relationship is considered for testing moderation (Arbuckle, &

Wothke, 1999; Baron & Kenny, 1986; Jaccard & Wan, 1996).

Gender

Since gender is a categorical variable hence a multiple group analysis is necessary to test

the moderation effect (Bollen, 1989; Jaccard & Wan, 1996; Joreskog & Sorbom, 1993). So the

data file was split into two groups ‘Men’ and ‘Women’ the structural model for men and women

are tested separately by using AMOS and the results are as shown below.
For Men

Figure-4: Testing moderation effect of gender (men)

Table-6: Regression weights for men

Relationship Estimate P Significance
ZAcquisition<---ZVision 0.306 0.000 Significant at
0.000

For Women

Figure-4: Testing moderation effect of gender (women)

Table-7: Regression weights for women

Relationship Estimate P Significance
ZAcquisition<---ZVision 0.371 0.000 Significant at
0.000

Table-6 and 7 show that the by taking gender as a moderator on the relationship between

CRM vision and customer acquisition the regression weight for men is found to be 0.31 and for

women it is 0.371 respectively and different from each other. Though they are different but their

significance can be tested by critical ratio test. So from critical ration test the pairwise parameter
comparison which should be more than 1.96 to confirm moderation effect is found to be 0.058

which is less than 1.96 (Judd, Kenny & McClelland, 2001). Therefore there is no moderation

effect of gender or gender is not moderating the relationship between CRM practices and

customer acquisition.

Moderation effect of Job satisfaction

The moderation effect of job satisfaction is tested in the following structural model by

using AMOS. And the regression weight after introducing the interaction variable can be seen

from table-6.

(Table-5: Moderation effect of job satisfaction)

Table-6: Regression weights after the introduction of moderator

Relationship Estimates P Significance
ZAcquisition  Z Vision 0.251 0.011 Significant at p<0.05
ZAcquisitionZInt_JS_V -0.235 0.000 Significant at p<0.000
ZAcquisitionZJob_Satisfcation 0.010 0.023 Significant at p< 0.05
ZAcquiition-Standardized acquisition –Dependent variable
ZVision-Standized vision – Independent variable
ZJob satisfaction Standardized job satisfaction- Moderator
ZInt_JS_V- Standardized interaction-Interaction

Table-6 shows that the effect of vision, job satisfaction and the interaction variable on

customer acquisition are significant at p<0.05. Therefore there is a moderation effect of job

satisfaction on the relationship between CRM vision and customer acquisition (Judd, Kenny &

McClelland, 2001). We can conclude that employee’s job satisfaction moderates the relationship

between CRM vision and customer acquisition. From the figure-6 it is evident that job

satisfaction dampens the effect of CRM vision on customer acquisition.

4.5

4
Customer Acquistion

3.5 Moderator
Low Job
3
Satisfaction
2.5 High Job
Satisfaction
2

1.5

Low Vision High Vision

Figure-6: The moderation effect of Job satisfaction on the relationship between CRM
vision and customer acquisition
 Table-7: Results of Hypotheses testing
Hypotheses Regression weights P Result
H1 0.086 0.021 Accepted
H2 0.12 0.001 Rejected
H3 0.047 0.144 Rejected
H4 -0.044 0.218 Rejected
H5 Rejected
H6 Accepted

Conclusion

The study explored the impact of Gartner’s CRM practices on customer acquisition. The

statistical results reveal that all the CRM practices do not influence customer acquisition. The

practices related to CRM vision of the selected retail store have a significant positive influence

on customer acquisition. The practices related to creation of valued customer experience,

customer experience and organizational collaboration show no significant influence on customer

acquisition. Retailer should improve on these practices. And job satisfaction moderates th effect

of CRM vision on customer acquisition.

The findings of the study are in accordance with Peelen, Montfort, Beltman & Klerkx,

2009; Seeman, O’Hara, 2006 which highlighted a positive influence of CRM on customer

acquisition. Reinratz et al. (2004) and Becker et al. (2009) have also found a positive relation

between CRM and customer life cycle management.

This study practically examines the influence of Gartner’s CRM best practices on

customer acquisition under the moderating effect of employee’s job satisfaction and gender

which is not done before. It may assist the CRM practitioners to decide what to practice and to
the selected retailer to identify the strong and weak CRM practices with respect to customer

acquisition. It also provides an opportunity to the retailer for further CRM practices development

and to identify the conditions for CRM success. Further, it strengthens the literature on Gartner’s

CRM practices and its influence on customer life cycle.

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